Taiwan to ink economic cooperation framework agreement with China by month end

21-Jun-10

Taiwanese government targets the date of June 30 to sign an economic cooperation framework agreement (ECFA) with China. The ECFA remains largely unchanged, but few differences remain to be resolved. The administration believes that the ECFA will usher in substantial benefits for Taiwan economy, despite continuing criticisms from certain circles in the country. In the third formal round of working-level ECFA talks that ended in Beijing June 13, China agreed to Taiwan's proposed list of 500 items that will be entitled to preferential tariff treatment under the ECFA, while China listed some 200-odd items that were accepted by Taiwan. Post discussions, the number of products on Taiwan's list is likely to be increased to 510, while the Chinese list could rise to 260 or 270. Discussions are underway with Chinese trade negotiators about few products that Taiwan suppliers wish to be included on the 'early harvest list' that are entitled to tariff concessions on shipments to China. Leading petrochemical companies in Taiwan have stepped up lobbying to include three major products PE, PVC, and PP on the early harvest list, a move strongly resisted by Chinese negotiators. Negotiations are underway, but the final decision on the list will be made by the Chinese counterparts, akin to the Taiwanese government having the final word on Chinese products to be allowed into Taiwan with preferential tariff rates.